LONDON (Alliance News) - MX Oil PLC Friday said it has disposed of certain investments totalling about GBP400,000 in order to reinvest the funds to pursue its investment interests in Mexico.
"Mexico's energy industry is being reopened to the private sector to attract greater foreign investment and expertise to develop its substantial hydrocarbon reserves," the AIM quoted oil and gas investment company, which is focused on the re-opening Mexican energy sector, said in a statement.
The company is in the process of incorporating its joint venture company with Geo Estratos, it said.
Under the joint venture agreement, MX Oil said it intends to invest USD1.0 million of debt into the joint venture company to fund its share of the costs associated with an investment in the region. This will be made up of the proceeds of the GBP400,000 sale and cash from the balance sheet.
MX Oil said it is in discussions with Pemex, the state owned national oil company, with regards to making an application for a production sharing agreement and licences in respect of the three assets in Mexico, as previously announced.
MX Oil said it expects to make its investment shortly.
"Combined with our recent oversubscribed placing of GBP2.0 million, the proceeds from the disposal of some of our investments for a small profit will be put to good use as we look to secure our position as an early mover in the vast Mexican energy sector," Chief Executive Stefan Olivier said in a statement.
"We are highly encouraged by the progress we have made to date which has seen us secure a joint venture with a well-connected local partner with a proven track record in the Mexican energy sector, and recently enter constructive discussions with both the Mexican authorities and state-owned Pemex with a view to securing our first concessions, each of which has company-making potential," the CEO said.
"The review of the available opportunities is proceeding apace, and as a result we have decided to proceed with the incorporation and funding of the joint venture company," the CEO added.
MX Oil shares Friday closed down 3.3% at 4.43 pence.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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